In general, a secure program must ensure that it synchronizes its
clients to any assumptions made by the secure program.
One issue often impacting web applications is that they forget to
specify the character encoding of their output.
This isn’t a problem if all data is from trusted sources, but if
some of the data is from untrusted sources, the untrusted source may
sneak in data that uses a different encoding than the one expected
by the secure program.
This opens the door for a cross-site malicious content attack; see
Section 5.12 for more information.

Many web pages leave the character encoding
("charset" parameter in HTTP) undefined.
In earlier versions of HTML and HTTP, the character encoding
was supposed to default to ISO-8859-1 if it wasn’t defined.
In fact, many browsers had a different default, so it was not possible
to rely on the default being ISO-8859-1.
HTML version 4 legitimizes this - if the character encoding isn’t specified,
any character encoding can be used.

If the web server doesn’t specify which character encoding is in use,
it can’t tell which characters are special.
Web pages with unspecified character encoding work most of the time
because most character sets assign the same characters to byte values
below 128.
But which of the values above 128 are special?
Some 16-bit character-encoding schemes have additional
multi-byte representations for special characters such as "<".
Some browsers recognize this alternative encoding and act on it.
This is "correct" behavior, but it makes attacks using malicious scripts
much harder to prevent.
The server simply doesn’t know which byte sequences
represent the special characters.

For example, UTF-7 provides alternative encoding for "<" and ">",
and several popular browsers recognize these as the start and end of a tag.
This is not a bug in those browsers.
If the character encoding really is UTF-7, then this is correct behavior.
The problem is that it is possible to get into a situation in which
the browser and the server disagree on the encoding.

Thankfully, though explaining the issue is tricky, its resolution in HTML
is easy.
In the HTML header, simply specify the charset, like this example
from CERT:

From a technical standpoint,
an even better approach is to set the character encoding as part of
the HTTP protocol output, though some libraries make this more difficult.
This is technically better because it doesn’t force the client to
examine the header to determine a character encoding that would enable it
to read the META information in the header.
Of course, in practice a browser that couldn’t read the META information
given above and use it correctly would not succeed in the marketplace,
but that’s a different issue.
In any case, this just means that the server would need to send
as part of the HTTP protocol, a “charset” with the desired value.
Unfortunately, it’s hard to heartily recommend this (technically better)
approach, because some older HTTP/1.0 clients did not deal properly with
an explicit charset parameter.
Although the HTTP/1.1 specification requires clients to obey the parameter,
it’s suspicious enough that you probably ought to use it as an
adjunct to forcing the use of the correct
character encoding, and not your sole mechanism.